Category: Oil and Gas business

Certain transactions that are in substance borrowings repayable in cash or its equivalent and shall be accounted for as borrowings and may not qualify for the recognition and reporting of oil and gas reserves. These include: (1) Cash advances to operators to finance exploration in return for the right to purchase oil or gas discovered, (2) Funds advanced for exploration that is repayable by offset against purchases of oil or gas discovered, or in cash if insufficient oil or gas is produced by a specified date. (3) Funds advanced to an operator that are repayable in cash out of the proceeds from a specified share of future production of a producing property, until the amount advanced plus interest at a specified or determinable rate is paid in full, shall be accounted for as a borrowing and do not qualify for the recognition of reserves. The advance is a payable for the recipient of the cash and receivable for the party making the advance. Such transactions fall into a category commonly referred to as production payments.

Crude oil began futures trading on the NYMEX in 1983 and is the most heavily traded commodity

For instance if natural gas is not available through the fault of the gas supplier or the transmission company, it could be incumbent upon the party in breach of the contract to pay the burden of the cost of alternative fuels (usually limited in time and scope). Under the gas transportation agreement between INGL and gas consumers in Israel it appears that if gas is not supplied (due to negligence or FM) that the consumer will have to bear the burden of the cost of the alternative fuels as well as additional damages caused. Only if INGL can be held responsible for the damage caused will they have to compensate the consumers for the cost of alternative fuels, but only up to a cap of 15% thereof.

Natural gas pipeline companies have customers on both ends of the pipeline – the producers and processors that input gas into the pipeline, and the consumers and local distribution companies that take gas out of the pipeline. In order to manage the natural gas that enters the pipeline, and to ensure that all customers receive timely delivery of their portion of this gas, sophisticated control systems are required to monitor the gas as it travels through all sections of what could be a very lengthy pipeline network. To accomplish this task of monitoring and controlling the natural gas that is traveling through the pipeline, centralized gas control stations that collect, assimilate, and manage data received from monitoring and compressor stations are placed all along the pipe

This happens when for instance with LNG which is increasingly seen as a flexible, readily available, competitively-priced option for countries struggling to meet future energy demand, which leads to more new import infrastructure being built, while capacity in producer countries is not keeping pace, thus creating a future squeeze on an already tight market. A tight market in the energy field is defined as one where there is very little spare capacity between petroleum producing countries and global consumption

Coral services include: coordination of all vessels, floating cranes and barges in Israel; Assistance finding / chartering adequate vessels for offshore projects; Notification and coordination of works with the Israeli Ministry of Transport; Coordination of arrival with all other relevant authorities; Daily coordination of works with  the various authorities; On line assistance to all vessels, barges and floating cranes throughout the project regarding work in port area; Arrangement of navigational procedures with Haifa radio station; Coordinating of emergency medical evacuation procedure. Other services include: Consulting on setup in Israel; Consulting and assistance in obtaining relevant agreements with the custom and immigration authorities; Supervision of all transhipments arriving in Israel; Consulting on the delicate relations with port management and stevedore unions; Assistance with accommodation for work team; Handling of all incoming / outgoing crew; Providing custom clearance services; Coordination of custom clearance of all equipment / spares arriving for the project; Arrangement of regular supplies, such as fresh food for the crew and other supplies; Ordering, purchase and supply of technical equipment. This includes obtaining various quotes and selecting best offer; Coordination of repairs/ maintenance for the equipment at local workshops/ shipyard; Ordering, purchase and supply of bunkers and fresh water for the vessels; Supply of mobile phones / faxes to vessels and relevant personnel in order to enable close coordination between all parties

In Israel there are three pipelines for crude oil: A 42″ crude oil pipeline of 254 km linking the Red Sea port of Eilat with the Mediterranean port of Ashkelon; a 16″/18″ crude oil pipeline of 197 km connecting Ashkelon with the Haifa refinery and a 18″/16″ crude oil pipeline of 36 km connecting Ashkelon with the Ashdod refinery with a maximum throughput capacity of 7 million tons.

In order to reduce risks and costs of exploration newer techniques are constantly being developed. One of the lacuna of seismic surveys is that it provides little data regarding the nature of fluids discovered within structures and cannot easily distinguish between waterbearing and hydrocarbon bearing geological formations. Until recently the only way to identify whether hydrocarbons were present was to drill. Over the last few years O&G companies have begun using controlled source electromagnetic imaging (CSEM) as a key component in their exploration tool kits to complement their seismic data, gain a more complete picture of the sub-surface, delineate reservoirs and reduce the risk of drilling costly dry holes. The technique uses electro-magnetic signals to map the variations in the resistivity of the geological formations below the seabed. The resistivity in hydrocarbon bearing layers is typically between 10 and 100 times greater than the surrounding strata. CSEM uses this contrast in the resistivity between water and hydrocarbons to detect and delineate structures that are likely to contain oil and gas.

The gas flow rate equivalent to the speed of sound in that fluid. Exceeding this limit during gas production accelerates corrosion in the pipelines